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Face-to-face spending fell, contactless spending rose amid pandemic: KDI Updated: 2021-05-11 17:03:29 KST

In its latest report on Tuesday, the Korea Development Institute said the COVID-19 pandemic led to an almost 10 percent drop in overall household spending last year.
In particular, the outbreak led to a five percent fall in face-to-face household consumption, but brought about a four percent uptick in contactless shopping.
The state-run think tank attributed the change to strict social distancing measures and mounting concerns over the virus.
It also explained that the consumption trends in 2020 appear to be different from previous economic downturns.

"Despite the economic slowdown caused by COVID-19, durable goods consumption has increased by a large margin and this behavior is quite different from that of the past crises."

Usually when the economy is in a slump, households cut unnecessary spending, such as purchases of durable goods, but last year, contactless consumption centered around durable goods.
In particular, the 20 percent bracket on the highest incomes spent more on cars, while consumers in the third and fourth highest brackets, the middle-income groups, spent more on furniture and home appliances.
However, overall consumer spending fell for all income groups except the lowest 20-percent.
This partially implies that this group, which was hit hard by the pandemic, used the government's COVID-19 relief funds to support their spending, rather than for saving.
The Korea Development Institute expects household consumption, and especially face-to-face shopping, to recover once the pandemic dies down.
Min Suk-hyen, Arirang News.
KOGL : Korea Open Government License
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